Simon Johnson's Blog, page 22

February 11, 2014

That’s the Whole Point

By James Kwak


The Wall Street Journal reports that the federal financial regulators may yet again carve a  loophole in the Volcker Rule. This time, the issue is whether banks subject to the rule’s proprietary trading prohibitions can hold collateralized loan obligations (CLOs)—structured products engineered out of commercial loans, just like good old collateralized debt obligations were engineered out of residential mortgage-backed securities during the last boom.


The reason to prohibit positions in CLOs obvious: it was portfolios of similarly complex, opaque, risky, and illiquid securities that torpedoed Bear Stearns, Lehman, Citigroup, and other megabanks during the financial crisis. The counterargument is one we’ve heard many times before: If banks are forced to sell their CLOs, they will have to do so at a discount, which will “have a material negative impact to our capital base,” in the words of one banker.



But think about it for a second. Why would selling CLO tranches reduce a bank’s capital? Capital is defined as assets minus liabilities; if you sell a CLO and get its value in cash, you have just exchanged one asset for another, and your capital is unchanged. The dirty not-so-secret is that the banks are afraid of having to sell their CLOs for less than the values at which they are carrying them on their balance sheets, which will reduce their capital (and, more importantly to their executives, their current-year accounting profits).


But this is one of the things that everyone should have learned back in 2008. If you sell something for less than its stated book value, it’s not the sale that’s making you economically worse off; it’s the fact that the thing is already worth less than you paid for it. If a bank is carrying a CLO at 100 cents on the dollar, and no hedge fund out there is willing to pay more than 90 cents, then it’s only worth 90 cents. The bank’s capital is already impaired; it’s just lying about it using accounting rules to avoid admitting it. If forcing banks to sell their CLOs is the only way to get them to recognize their actual value, then that’s a feature, not a bug.


Then the other argument is, you guessed it: prohibiting banks from holding CLOs tranches will reduce demand for the underlying loans, making it harder for companies to get credit. But again, that’s a good thing. Right now, banks are willing to overpay for CLOs (or, rather, they are unwilling to sell them for their actual market value, which amounts to the same thing in economic terms) because of accounting reasons. That means that we have too much demand for CLOs, which means we have too much credit. As we again should have learned in 2008, too much credit can be just as bad as—or sometimes much, much worse than—too little credit. It’s a distortion, and as any free market economist should tell you, getting rid of it is a good thing.


If CLO issuance is down, you can blame it, as Morgan Stanley does, on “regulatory uncertainty.” But what it really means is that the investors who only care about making money—such as hedge funds—don’t want to fund these loans, at least not at the terms on offer. That means that the economy will be better off if the loans do not happen. This is all the way things are supposed to be—except in that twisted fantasyland of bank lobbyists.



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Published on February 11, 2014 03:30

February 10, 2014

Why We Have a Debt Problem, Part 23

By James Kwak


So, we have eleven aircraft carrier groups. No other country in the world has more than one. Everyone who has looked at the issue has agreed that we could do with fewer than eleven while still achieving our national security goals: Bush/Obama Defense Secretary Robert Gates, Obama Defense Secretary Chuck Hagel, and think tanks on the left and the right.


But apparently we can’t retire even one–even though we would save not just the annual operating costs, but most of the $4.7 billion it will cost to refurbish over the next five years. Instead, the Obama Administration has promised the Pentagon that it can simply have more money and not comply with the spending limits set in the 2011 debt ceiling agreement (and modified by Murray-Ryan).




Why? Well, legislators from states with Navy bases don’t want to reduce the Navy’s budget. More important, though, few people want to be for a smaller military–even when our military is irrationally large, given our other national priorities (healthcare, education, infrastructure, etc.). Instead of asking whether we need eleven times as many aircraft carriers as any other country, defenders insist that any reduction is a sign of weakness–conveniently overlooking the fact that we used to have fifteen carriers, and the world hasn’t ended.


The obvious underlying problem is that every line item in the budget has an interest group that wants it in there. The slightly less obvious underlying problem is that every budgetary debate is fought on its own, without regard to the tradeoffs it entails. Who is going to be against more and in favor of less? (Actually, when it comes to the military, I would, given the problems that having a super-strong military has caused us–think of Iraq, for starters–but that’s not a viable political position.)


The inability to keep more than one thing in mind at a time is a natural human limitation. How many times have you seen a meeting’s outcome be determined by the last idea that someone had, regardless of how it compared to all the ideas that came before? But it’s no way to run a country.



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Published on February 10, 2014 04:30

February 7, 2014

The Prosecution That Isn’t Happening

By James Kwak


People keep asking why no senior executive has gone to jail for the misdeeds that produced the financial crisis—and cost the United States more than $6 trillion, or $50,000 per household, in lost economic output. The usual answers are that no one did anything wrong (oh, come on) or, more realistically, that it’s too hard to convict individuals in complex financial fraud cases.


At the same time, however, the U.S. Attorney’s office for the Southern District of New York—the district that includes Wall Street—has amassed a 79-0 record in insider trading cases, including yesterday’s jury verdict against Mathew Martoma, a trader at the hedge fund firm SAC Capital Advisors. In Martoma’s case, he obtained confidential information about a clinical trial for a drug being manufactured by two pharmaceutical companies and, according to the jury, convinced his boss, Steven Cohen, to unload the firm’s positions in those two stocks.


Now, despite the 79-0 record (which includes guilty pleas), insider trading is not necessarily the easiest thing in the world to prove, especially in a criminal action. Insider trading is a violation of SEC Rule 10b-5 (see the Martoma indictment), which requires the prosecution to prove a series of elements, including scienter—that the defendant knew he was doing something wrong—beyond a reasonable doubt. Proving that something was going on inside someone’s head is tough, but it can be done.


Now guess what? Rule 10b-5 is also one of the ways to go after someone for the kind of securities fraud that helped produce the financial crisis. The SEC’s successful civil action against “Fabulous” Fabrice Tourre of Goldman Sachs, for defrauding investors in an ABACUS collateralized debt obligation, was also predicated on violations of Rule 10b-5 (and Section 17(a) of the Securities Act of 1933, which is similar). Yet while the Southern District has convicted 79 people of insider trading, when it comes to engineering the financial crisis, only two people have gone down—Tourre and Countrywide’s Rebecca Mairone—and they were both found liable on civil, not criminal charges. (And in Mairone’s case, the prosecution had to rely on special statutes covering fraud committed against government agencies.)


You might say that Mathew Martoma is no senior executive, and you would be right. As one witness said, Martoma was only a “grain of sand” next to Steven Cohen, the head of SAC Capital Advisors and the man the Southern District and the FBI really wanted to nail. But the SEC is going after Cohen, too, on civil charges of negligent supervision. That is, with eight SAC employees having been convicted of insider trading, the claim is that even if Cohen didn’t know what was going on (as of yet, the SEC seems to think they don’t have enough evidence to make that stick), he must have been negligent in supervising his firm’s portfolio managers.


So why isn’t anyone going after Lloyd Blankfein, Angelo Mozilo (for something other than dumping his own Countrywide stock), Jamie Dimon, or any of the other CEOs who, at best, were unaware that their lieutenants and foot soldiers were ripping off their clients? It’s true that negligent supervision is a specific type of liability that applies to investment advisors (although any big bank these days includes dozens of investment advisory firms within its umbrella), but it’s hard to imagine that an imaginative prosecutor couldn’t come up with another source of liability. Tourre, for example, was found liable for aiding and abetting wrongdoing committed by Goldman Sachs. Whom, then, was he aiding and abetting?


Sure, insider trading is a bad thing, but in the grand scheme of things it’s peanuts compared to the financial crisis and the behavior that produced it. The SEC likes to talk about maintaining “confidence in the markets” among ordinary investors, and people like Mathew Martoma certainly don’t help, but there are other, bigger things to worry about: the legal insider trading that corporate executives do routinely under cover of 10b5-1 plans, for one thing, or the prospect of a technological meltdown in the markets, for another.


It’s easy enough to come up with sinister theories for why the powers that be seem more interested in pursuing insider trading cases than financial crisis cases, which I won’t bother mentioning. There are less sinister theories as well. Maybe, five years after the financial crisis, it’s easier to tell a story about a rich hedge fund manager cheating (Martoma “bought the answer sheet,” U.S. Attorney Preet Bharara said) than about a less-rich investment banker misleading his even-less-rich buy-side clients investing their not-rich-at-all customers’ pension funds.


But that’s not the way the laws should be applied. Ideally, they should be applied fairly. We know that in a world of scarce resources it’s not possible to hold every wrongdoer accountable. Failing that, however, we should punish the people who do the most harm and deter the kinds of misbehavior that will cause the most harm in the future. It’s hard to think of something that caused more harm than the financial crisis. But the heavy artillery of our legal system are looking elsewhere.



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Published on February 07, 2014 11:22

January 27, 2014

“All You Need for a Financial Crisis . . .

By James Kwak


. . . are excess optimism and Citibank.”


That’s a saying that someone, probably Simon, repeated to me a few years ago. Crash of 1929, Latin American debt crisis, early 1990s real estate crash (OK, that wasn’t a financial crisis, just a crisis for Citibank), Asian financial crisis of 1997–1998, and, of course, the biggie of 2007–2009: anywhere you look, there’s Citi. Sometimes they’re just in the middle of the profit-seeking pack, but sometimes they play a leading role: for example, the Citicorp-Travelers merger was the final nail in the coffin of the Glass-Steagall Act and the immediate motivation for Gramm-Leach-Bliley.


Citigroup is also the poster child for one of the key problems with our megabanks: the fact that they are too big to manage and, on top of that, the usual mechanisms that are supposed to ensure half-decent management don’t work. Around 2009, if you were to describe the leading characters in the TBTF parade, they were JPMorgan, the last man standing (not so much anymore); Goldman, the sharks who bet on the collapse; Bank of America, the ego-driven empire-builder; and Citi, the incompetent (“I’m still dancing”) fools.


For these reasons, Art Wilmarth thinks it’s important to understand exactly what went wrong at what was, relatively recently, America’s largest bank. He has a new paper out discussing the many failings of Citigroup in the decade leading up to the financial crisis in great detail. I don’t think it contains any new facts that weren’t in the public record, but he does draw a lot of his examples from court documents (such as the Enron bankruptcy examiner’s report) that most of us haven’t read, so you will probably learn something.


The picture he paints is one of constant attempts by executives to take more risk, either by exploiting regulatory loopholes or by turning a blind eye to employees who raised red flags. From Enron and WorldCom through biased equity analysts, predatory lending, market-rigging, and Japanese private banking violations to the spectacularly late plunge into CDOs and the nutty decision to buy Vikram Pandit’s mediocre hedge fund, the only question is whether top executives encouraged lawbreaking and irrational risk-taking or whether they were too clueless to realize it was going on (Robert Rubin’s famous defense). At the same time, Citi was being aided and abetted by regulators, all the way up to New York Fed President Tim Geithner, who made little effort to ensure that the bank had appropriate risk management and compliance processes. And Wilmarth even leaves out a few, like auction-rate securities (Citigroup settled with the SEC in 2008) and LIBOR (Citigroup was the bank that hired Tom Hayes away from UBS in 2009).


Most importantly, there’s little evidence that our biggest banks are any more ably run now than they were in the past decade. The once-lauded JPMorgan is now Exhibit A (London Whale, overlooking Bernard Madoff’s Ponzi scheme, money laundering, bribing Chinese officials by hiring their relatives). People like to talk about how the financial system is safer than it was seven years ago—something I’m skeptical about. But even if it is, the too-big-to-manage problem is bad for lots of reasons other than overall stability: just ask people who bought WorldCom stock, or invested with Bernie Madoff, or took out LIBOR-linked loans, or pay inflated aluminum prices because banks are artificially limiting supply. Yet their stock prices continue to climb, because investors realize that the further the financial crisis fades into the rear-view mirror, the more easily the megabanks can find new sources of profit by exerting market power and skirting regulations.



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Published on January 27, 2014 03:30

January 14, 2014

Missing the Point

By James Kwak


The Basel Committee’s recent decision to change the definition of the leverage ratio is bad news for two reasons.


There’s the obvious: A smaller denominator means less capital. The leverage ratio requirement says, in principle, that banks must have capital equal to at least X% of their total unweighted assets, where “assets” is supposed to include anything they hold that could fall in value. Take some bank that has some amount Y of traditional assets and other things that could fall in value, like derivatives positions. Then it has to have capital equal to X * Y / 100. If we take the exact same bank but decide to call Y some smaller number, say Z, then it can get bay with less capital. Less capital = more risk.


Then there’s the slightly less obvious. The whole point of the leverage ratio is to safeguard against the ability of banks to game capital requirements based on risk-weighted assets. Under Basel I and II, banks had to hold capital equal to some percentage of their assets, but those assets were weighted according to their perceived (or politically defined) risk. Most notoriously, all sovereign bonds had a risk weighting of zero, no matter what country issued them, so if all you held was Greek bonds, you didn’t need to have any capital. The leverage ratio is supposed to provide a backstop so that no matter how clever the bankers and their lawyers are, the bank still has to hold some capital.


For this reason, the definition of assets for leverage ratio purposes should really include everything you can possibly think of: non-netted derivatives, implicit guarantees to off-balance-sheet entities, everything. Then we can argue about what the percentage should be. But it makes no sense to have a leverage ratio definition that doesn’t include everything, because then banks will be able to game it. At the end of the day, we’ll just have two different risk-weighting mechanisms, each of which is fodder for clever lawyers and accountants.


The only partial hope is that the United States will hold the line with a strict definition of the leverage ratio and a higher percentage than that in Basel. This is the one thing that Tim Geithner promised when he was fighting every other serious attempt to solve the TBTF problem: higher, stricter capital requirements. Of course, now that the banks have had their way in Basel, they will use that as an argument for weakening U.S. capital regulations. It’s unlikely the Obama administration will try very hard to hold the line, given its record and the people who hold the economic policy positions these days. That more or less leaves Janet Yellen, who doesn’t have much of a record—good or bad—when it comes to standing up to big banks.



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Published on January 14, 2014 06:31

December 27, 2013

Preventing Civil War in South Sudan

By Simon Johnson.  This post comprises the first two paragraphs of a column that appeared on the NYT.com’s Economix blog on Thursday, December 26, 2013.  To read the full post, click here.


The news from Juba is very bad. South Sudan is in the throes of political conflict and serious fighting, with several hundred people reported dead and more injured, that has the potential to become civil war. Unless cooler heads prevail, the situation in the capital Juba, Bor (the capital of Jonglei state, about 125 miles to the north of Juba), Bentiu (capital of Unity state, which has a lot of oil) and elsewhere could spiral out of control.


The outside world needs to get serious about preventing the escalation of this conflict; we can do this by applying appropriate economic pressure to all the military forces involved and by enduring that oil revenues are not used to fuel the conflict. This will require China, India, France and the United States to cooperate closely and in ways that may not come naturally.


To read the rest of this post, click on this link to NYT.com’s Economix blog: http://economix.blogs.nytimes.com/2013/12/26/preventing-civil-war-in-south-sudan/?_r=0



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Published on December 27, 2013 07:18

December 11, 2013

Free Market Reflexes

By James Kwak


I’ve been reading a lot about education recently, for reasons that are not worth going into here. I don’t know that much about the area, so I’ve been reading some background stuff and review articles, including a Hamilton Project white paper by Michael Greenstone, Adam Looney, and Paige Shevlin.


It’s pretty mainstream, self-professed “third way” stuff, with a heavy dose of measurement and performance evaluation. Basically they repeat over and over again that educational policies should be based on evidence and new programs should go through rigorous assessments. There are a fairly strong tilt toward market mechanisms and some idealistic naivete about practical problems (e.g., “One way to [improve accountability systems] is to develop tests that measure the skills children should learn”), but nothing too outrageous in substance.


The white paper, however, betrays a certain conceptual bias that I find disturbing, even in topical areas where it seems otherwise reasonable.


Here’s one example, in the context of teacher effectiveness:


“According to one estimate, if average effectiveness could be raised enough to put American students on par with those from the highest-performing countries it could be worth as much as $100 trillion in national productivity benefits over the next eighty years (Hanushek 2010). The bottom line from this recent body of research is that potential benefits from increasing teacher quality are enormous.


“Realizing the gains from effective teachers requires attracting more qualified people into the profession and then identifying and retaining those who are most effective.”


I have no problem with the premise: better teachers improve student outcomes, which is worth a lot of money. But do you see what’s going on? To get better teachers, the authors say, requires ”attracting more qualified people” and then “identifying and retaining” the most effective ones.


That just doesn’t follow. And anyone who’s worked in an actual company should realize that. Yes, it’s always better to have better workers. One way to get better workers is to hire more effective people and to fire less effective people. But the other way—which, in most industries, is by far more important—is to make your current workforce more effective. You do that in part by figuring out what attributes or processes make people more effective, and in part by training people and implementing processes in ways that improve productivity.


The idea that the only way to improve teacher effectiveness (remember, they said “requires”) is to increase quality at the front end and link retention to quality on the back end is the kind of illogical, impractical inference you draw if you have a certain type of attitude toward workers: the attitude that there’s only one abstract attribute that matters (quality) and that it’s intrinsic and unchanging. What’s surprising is that this is a non-obvious kind of fallacy: again, anyone who has run a business realizes that what matters more is what you do with the workforce you have.


To a certain degree, this is the banking/consulting view of the world. Investment banks and consulting firms largely hire (at least for some positions) based on abstract quality measures that have relatively little to do with the skills you actually use in banking and consulting, and then use their review processes to weed out low performers. But even they (consulting firms, at least) place a large emphasis on on-the-job training, because they realize that many of their new recruits really have no relevant skills or knowledge.


This attitude is further reflected in this passage:


“But the relevant question is whether the combination of relatively low salaries and relatively high deferred benefits is the right formula to attract talented young people with many career opportunities to teaching, and to retain the most effective teachers throughout their career. . . .


“The bottom line, however, is that the teaching profession can have difficulty attracting the most talented people when relative salaries are in decline.”


Again, I agree with the basic point: we should pay teachers more. But it’s this idea of “talented young people with many career opportunities” and especially “the most talented people,” and the faith that it betrays in an abstract conception of talent, that bothers me. I’m arguably the kind of abstractly “talented” person the authors are thinking of. I have fancy degrees, and got a job at McKinsey, and did well in business, and wrote a bestseller. But I would have made a lousy K-12 teacher. I think I’m a decent law school teacher,* but that’s because my strengths are useful in a classroom with highly educated, highly motivated students, and my weaknesses would be much more of a problem in primary or secondary school. (For example, for the most part I don’t have to worry about motivating my students, or about discipline issues.)


As a policy recommendation, I have no problem with paying teachers more. At the margin, there’s probably some kind of positive correlation between abstract “talent” (as defined by, say, McKinsey or Goldman or TFA) and teaching effectiveness, so some of the people who would switch from banking to teaching would actually be good teachers—although, as the authors acknowledge, college GPA and college prestige are not valid predictors of teaching effectiveness. Maybe that’s all the authors mean.  But I also suspect that there’s a feeling, maybe not among these authors, but among the billionaires who like investing in education, of “if only more people like us became teachers”—that there are highly productive people and less productive people, and all we need is to adjust the incentives so more of the former go into teaching. I don’t think the world is that simple.


* Actually, I get good student evaluations, but the people who study these things say that there is no link between student evaluations and actual teaching effectiveness, which seems right to me.



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Published on December 11, 2013 07:01

December 2, 2013

No You Can’t

By James Kwak


Yesterday the Obama administration announced that healthcare.gov “will work smoothly for the vast majority of users.” Presumably they intended this as some sort of victory announcement after their self-imposed deadline of December 1 to fix the many problems uncovered when the site went live two months ago. But anyone who knows anything about software knows that it’s not enough to “work smoothly” for the “vast majority” of users.


Apparently pages are now loading incorrectly less than 1 percent of the time. Well, how much less? Pages failing 1 percent of the time make for a terrible web experience, especially for a web site where you have to travel through a long sequence of pages. There is evident fear that the current site will not be able to handle any type of significant load, like it will get around the deadline to sign up for policies beginning on January 1. And we know that “the back office systems, the accounting systems, [and] the payment systems”—in other words, the hard stuff—are still a work in progress.


None of this should come as any surprise—except to the politicians, bureaucrats, and campaign officials who run healthcare.gov. The single biggest mistake in the software business is thinking that if you throw resources at a problem and work really, really hard and put lots of pressure on people, you can complete a project by some arbitrary date (like December 1). It’s not like staying up all night to write a paper in college. This isn’t just a mistake made by people like the president of the United States. It’s made routinely by people in the software business, whether CEOs of software companies who made their way up through the sales ranks, or CIOs of big companies who made their way up as middle managers. You can’t double the number of people and cut the time in half. And just saying something is really, really important won’t make it go any faster or better.



Clearly all sorts of things were wrong before October 1 (and not just because they were relying on Oracle to do something other than supply a database). According to the Times, the website “had barely been tested before it went live,” which is a sure recipe for disaster. Back in my day, every feature was supposed to be finished three months before release. I know web companies do things differently today, but when it comes to performance they already know they can handle the load, and I doubt they cut corners when it comes to software that handles financial transactions. If you don’t have time to test, you shouldn’t ship. It’s that simple. Anything else is just wishful thinking.


It seems like healthcare.gov had at least two huge problems at launch. The first was performance—the ability of the system to deliver pages quickly when under load. I don’t have any insider information, but from the outside it sounds like a lot of what they are doing is switching hardware around, increasing the bandwidth at certain key chokepoints, and firing their hosting company. That’s all good, but performance is only secondarily a hardware issue. The software has to be designed properly to be scalable—so that adding twice the hardware will allow it to support twice as many users. If not, you need to scrap it and start from scratch. I can’t tell from the outside (and I couldn’t even tell from the inside) if it’s designed properly in this case, but I sure hope so, because otherwise no amount of hardware shuffling will do the trick.


The other problem was data integrity. When you’re dealing with financial transactions, it’s really, really important that the data don’t get messed up between the two counterparties. But it seems like, at a minimum, customer records weren’t making it through to the insurers. It sounds like fixing that mess has been deferred until later. It could be as simple a problem as bad data mapping between one data model and another. But fixing these problems involves another software quality issue. With high-quality code, it’s relatively easy to find and fix these errors. With bad code, it’s hard to find bugs and it’s harder to fix them without destabilizing the rest of the system. Again, let’s hope for the former.


I’m not technically skilled enough to be the type of person you would want making decisions about this mess, and I don’t know anything more than you can read in the newspaper. But when custom software projects go this badly, I think that in general (meaning more than half the time) you are better off cutting your losses and starting over. Obviously there are administrative and political reasons why the Obama administration can’t do that. We know that this project has to succeed like few other projects in history, and it will get there one way or another. But there’s no magic bullet, and neither hope nor trying harder is a viable strategy.



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Published on December 02, 2013 03:30

November 27, 2013

Why JPMorgan Is JPMorgan

By James Kwak


Which is to say, a basket case. Along with Citigroup, and Bank of America.


We all know that JPMorgan Chase is too big to fail. We all know that this means that it enjoys the benefit of a likely bailout from the federal government and the Federal Reserve should it ever collapse in a financial crisis. So why does that make it a poorly run company? It’s possible for a behemoth to be well run; think of Intel in the 1990s, for example.


One reason, of course, is that it’s too big to manage. Even if bribing Chinese officials by hiring their children wasn’t part of the master strategy, not being able to stop it from happening is a sign that things aren’t really under control. (And for “bribing Chinese officials,” you can insert any number of other things, like “betting on the relative values of various CDS indexes,” or “manipulating LIBOR.”)


Mark Roe (blog post; paper) points out another reason. For decades, the supposed cure for bad management has been the so-called market for corporate control. In other words, do a bad job, and someone will take over your company and you’ll be out of a job. That someone might be a corporate raider like T. Boone Pickens, or it might be a private equity firm, but in either case bad management is a sign of opportunity.


Not so with too-big-to-fail banks. For one thing, TBTF banks  are impossible to acquire in one piece: no other bank could absorb JPMorgan, even if there weren’t the rule against a banking conglomerate having more than 10 percent of all U.S. deposits. The other option is to engineer a breakup, which is what all manner of shareholder advocates have been arguing for. But, Roe argues, if being too big to fail is your competitive advantage, that would kill the golden goose. Therefore, the market for control doesn’t work properly, and these behemoths continue bumbling along their way—not just threatening the financial, but doing a lousy job at their job of providing credit to the economy.



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Published on November 27, 2013 10:18

October 28, 2013

Parenting

By James Kwak


My seven-year-old daughter’s new favorite song is, no joke, “Banks of Marble,” sung by Pete Seeger. I swear I had nothing to do with it. She found a Pete Seeger CD one day, which I didn’t even know we had, and put it into our old boombox/CD player when my wife and I were out. (There was a babysitter over, but she was mainly taking care of my toddler son.) When we came home later that afternoon, she announced that it was her favorite song, and that her favorite part was the last verse.


For those who don’t know why this is remarkable, here are the lyrics to the last verse and final chorus:


I’ve seen my brothers working

Throughout this mighty land;

I prayed we’d get together,

And together make a stand.


Then we’d own those banks of marble,

With a guard at every door;

And we’d share those vaults of silver,

That we have sweated for


Of course, this is the girl who is quoted in White House Burning saying, at age five, that Social Security sounds like “the best program ever.”





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Published on October 28, 2013 18:48

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